The National Association of REALTORS® is calling on Congress to act now to reform and extend the National Flood Insurance Program, which is set to expire on July 31. Allowing the deadline to lapse would deny necessary insurance coverage to homeowners and buyers in more than 20,000 communities nationwide.

The NFIP provides up to $350,000 of flood insurance coverage for federally-backed mortgage in 22,000 communities nationwide. It also provides an alternative to taxpayer-funded disaster assistance. While there is a growing market for private flood insurance, for many, the NFIP continues to be the primary source of asset protection against flooding, the most common and costly natural disaster in the U.S.

In November last year, the House of Representatives passed the NAR-supported 21st Century Flood Reform Act, which contains numerous important provisions for consumers. The Act reauthorizes the NFIP for a full five years, avoiding the uncertainty of short-term extensions and potential shutdowns and provides guidelines for creating better flood maps for the program. It limits maximum flood insurance premiums to $10,000 per year for residential properties, and directs FEMA to develop more granular rate tables to ensure fewer properties are overcharged by the NFIP. The bill sets aside $1 billion for flood mitigation assistance grants and increases access to private market flood insurance, which often offers better coverage at lower cost. The bill also addresses issues with repeatedly flooding properties that account for 2 percent of NFIP policies and 25 percent of claim payments over the history of the program.

The bill is now in the Senate. NAR is urging the Senate to act quickly. The last time the NFIP expired, approximately 1,400 home closings were interrupted each day until the program was reinstated. In all, the program has lapsed on a number of separate occasions for two months combined with a total of 23 separate short-term extensions.